Public sector insurers take pride in maximising their support for the public sector, which includes incorporating elements of social value.
While insurers can provide social value, it is essential for public sector customers to consider what insurers can offer. For example, Zurich Municipal’s social value offerings derive genuine benefits for the public sector, your communities, and your residents.
However, public sector insurance tenders often impose the same social value requirements on insurers as they would on other suppliers: for example, a local construction company hired to build a new leisure centre. These requirements can be impractical for an insurer to meet.
The Social Value Portal
The Social Value Portal uses the National Themes, Outcomes and Measures (TOMS) framework. This framework uses financial 'proxy values' to help organisations measure and quantify the wider value they create for society. The calculation shows the benefit over what would happen without the activity, applying a proxy value to the delivery of social value outcomes.
Implementing this process reduces the administrative burden for a public sector organisation. However, it significantly increases the workload for suppliers.
Suppliers are required to use a separate, complex tender portal dedicated to social value. Suppliers must also pay an additional annual fee and consistently update the progress for each lot throughout the duration of the agreement.
Accountability growth – the Procurement Act
The Procurement Act comes into effect on 24 February 2025. It outlines reforms that are crucial and will improve how public money is spent, ensuring every pound benefits communities and public services.
The reforms focus on value for money, public benefit, transparency and integrity. The Act aims to modernise and unify systems and processes, and crack down on poor performers and fraudsters.
The Labour government also plans to expand social value in procurement by establishing a Social Value Council. This will be responsible for boosting the social value delivered through public contracts by driving accountability and defining best practices.
ESG, or the ESE of social value?
Social value in procurement is defined as: ‘ensuring that public spending generates additional economic, social and environmental benefits beyond just the goods or services being procured.’
So where does the ESE of social value fit in with Environmental, Social, and Governance (ESG) policies when evaluating social value? Your ESG policies should be considered as part of social value evaluation when those policies have a positive (and measurable) impact on your communities and residents.
We encourage you to reflect on the social value delivered since the awarding of your last tender. Consider the commitments made by the winning bidder and evaluate whether they have successfully fulfilled those promises.
When assessing social value responses, it is crucial to evaluate their practicality and the financial implications. For instance, if 10% of your tender is allocated to social value and your premium spend is £1 million, you are essentially considering paying up to £100,000 (each year) more for the social value propositions offered. It's important to ask: is the social value provided truly worth the additional cost?
Zurich Municipal outlines the social value we aim to deliver as a result of the contract award. Our customers need to define what matters most to the individual organisation, while keeping realistic expectations of what public sector insurers can provide.
When defining your requirements, focus social value where insurers can really add value. Sometimes tenders ask for things we can’t provide. For example, hiring local residents or offering local apprenticeships.
At Zurich, we are committed to fair recruitment, giving everyone an equal opportunity. Our hiring managers follow our Fair Recruitment Charter closely. Because of this, we are unable to offer job placements or apprenticeships as part of our social value proposition.
But we can still help. We have lots of talented people and specialist partners, who can support your communities and help individuals find work.
Digital enhancements save both time and expenses
We know it's important to support local communities. But sometimes our office locations make that tough. That's why we provide our services online.
We know we are not experts in this area, so we have teamed up with charity Teach First to create podcasts on CV writing and interview skills. These can be sent to schools, colleges, and other local groups to help job seekers.
This way, we can support social value without big costs or time commitments, which would increase your premiums.
New social value proposition
At Zurich Municipal, our commitment to social value is at the heart of everything we do. Our vision is to use our knowledge as a public sector insurer to bring social value and deliver real benefits for communities and residents.
We have developed a new proposition that illustrates how all public sector insurers can deliver social value, enabling measurement of contributions throughout the contract's duration and achieving a greater impact for public sector organisations.
We are keen to work with customers, partners, insurers, and brokers on the ongoing development of social value within the public sector.
